China says to throw its weight behind firms expanding overseas

BEIJING (Reuters) - China is rolling out a series of measures to aid overseas expansion by firms across industries, especially nuclear power and railways, the cabinet said on Wednesday.

China’s outbound investment last year hit $102.89 billion, for an annual increase of 14 percent, state news agency Xinhua said, but the country’s decade-old “going out” policy has primarily aimed to help state-owned firms establish themselves abroad.

The new measures would also aid steel, construction and equipment-making firms in “going out” by boosting trade and investment deals, and pushing domestic economic restructuring, the government said in a statement on its website.

The government pledged greater support for firms issuing stocks and bonds overseas and to broaden the use of foreign exchange reserves of $3.84 trillion to drive their growth.

It also promised “reasonable and convenient” financing for enterprises, and the use of “policy-based financial tools” to boost Chinese firms, besides working to foster angel investment and venture capital.

The new policy move could create friction between Beijing and some of its largest trading partners, including the United States, which has seen greater competition from China in emerging markets in recent years.

China’s government will also help provide subsidies for rent, broadband and software, as well as low-cost buildings for businesses, it said.

Chinese equipment makers have gained traction overseas, bolstered by a construction boom in Southeast Asia and South America, where new home and infrastructure building has lifted demand for affordable gear.

Private enterprises account for the majority of jobs created in China but often face a disadvantage against state-owned counterparts in tapping financing or government support.

Reporting by Koh Gui Qing, Beijing Newsroom and Megha Rajagopalan; Editing by Jacqueline Wong and Clarence Fernandez